Understanding Insurance Billing: Unraveling The Mystery Of Secondary Insurance

Whether or not it is the patient's responsibility to bill their secondary insurance depends on their location and the insurance provider. In some states, physicians are required to bill all insurers a patient has, whereas in others, they are not. If the physician has a contract with the secondary insurer, they are likely obligated to submit the bill. If not, they may be able to give the bill to the patient to submit for reimbursement.

It is important to note that having two insurance plans does not mean the patient has zero payment responsibility. The secondary insurance won't cover the primary insurance's deductible, and patients may still be responsible for copays or coinsurance.

Understanding the difference between primary and secondary insurance

It is not uncommon for individuals to have more than one health insurance plan. This could be in the form of two employer-sponsored health insurance plans, personal health insurance and employer-sponsored coverage, or employer-sponsored coverage and worker's compensation, to name a few.

Primary Insurance

Primary insurance is the first policy that is billed for medical expenses and it is responsible for paying a majority of the costs. It is typically the main source of coverage for an individual or family and is often obtained through an individual's employer or purchased directly. It is the insurance responsible for paying first on any claims.

Secondary Insurance

Secondary insurance is an additional insurance plan that an individual may have on top of their primary insurance. It acts as a backup plan or supplemental policy to fill in any gaps or additional expenses not covered by the primary insurance. It comes into play when the primary insurance coverage is insufficient to cover all the medical expenses or has been exhausted. It is not the main source of coverage and only comes into play after the primary insurance has paid its portion. Secondary insurance policies are often obtained through a spouse's employer or purchased separately.

Coordination of Benefits

When an individual has both primary and secondary insurance, the two plans work together through a process called "coordination of benefits" to ensure that the individual receives the maximum coverage and that both plans are not paying more than 100% of the bill total. This process can be state-regulated or internally regulated, with large businesses using their own coordination of benefits framework.

Billing Secondary Insurance Claims

When billing secondary insurance claims, it is important to first bill the primary insurance and receive payment before submitting a claim to the secondary insurance. It is also crucial to understand the eligibility and verification process for each insurance plan and confirm which plan is primary and which is secondary. This can depend on various factors, including the type of insurance the patient has, their age, and the size of the company providing the employee insurance plan. Generally, an individual's coverage from their employer is considered primary insurance, while coverage from a spouse or parent is considered secondary insurance.

Patient Responsibility

It is important to note that having two insurance plans does not mean that the patient has no payment responsibility. The secondary insurance will not cover the deductible or copayments of the primary insurance. Patients may still be responsible for copays or coinsurance even after both insurance plans have paid their portion of the claim.

Scenarios where patients may have two insurance plans

• A patient over the age of 65 who has Medicare but is still working at a company with 20+ employees, so they have an insurance plan through their employer, too.
• A patient over the age of 65 who has Medicare and has a supplemental insurance plan.
• A patient who has insurance through their employer but also has insurance through their spouse's employer.
• A patient who is 26 or younger and is still covered under their parents' insurance, but also has insurance through their employer.
• A child who is covered under each parent's insurance plan.
• A patient who is receiving worker's compensation and has an insurance plan.
• A patient who is receiving Medicaid but has another, private insurance plan.
• A member of the military who is covered under TRICARE but also has a private insurance plan.

In these scenarios, the patient's insurance plan through their employer is usually the primary insurance, and the secondary insurance is provided by the patient's spouse's employer, Medicare, or the patient's parents.

How to bill secondary insurance

Billing secondary insurance is a complex process that requires careful attention to detail. Here is a step-by-step guide on how to bill secondary insurance:

• Understand the difference between primary and secondary insurance: Primary insurance is responsible for paying the claim first, while the secondary insurance pays a portion of the remaining balance, which often includes the patient's copay.
• Verify the patient's insurance coverage: Collect up-to-date and accurate demographic information, including the patient's name, birthdate, and insurance plan subscription information. Check eligibility and verify insurance for each plan.
• Determine the primary and secondary insurance: If neither plan shows up as primary insurance, contact the patient to update their Coordination of Benefits (COB) with their insurer. The COB establishes which insurance plan is primary and pays first based on industry regulations, the type of insurance, and the patient's age.
• Bill the primary insurance first: Submit the claim to the primary insurance plan and wait for their payment and remittance.
• Note the allowable amount and adjustments: After the primary insurance processes the claim, note the allowable amount, the patient's responsibility, and any adjustments.
• Bill the secondary insurance: Submit the claim to the secondary insurance, including the original claim amount, the amount paid by the primary insurance, and the reasons for any remaining balance. Include remittance information and Explanation of Benefits (EOB) to avoid claim denial.
• Forward the remaining balance to the patient: Once the secondary insurance pays their portion, forward any outstanding amount to the patient.

To prevent secondary insurance claim denials, it is crucial to verify the insurance coverage and COB before submitting the claim. Common reasons for claim denials include COB issues and missing information, such as remittance details and EOB. By following these steps and paying attention to detail, you can effectively bill secondary insurance and ensure a seamless reimbursement process.

Preventing secondary insurance claim denials

• Coordination of Benefits (COB) issues: COB issues are one of the most common reasons for secondary insurance claim denials. To prevent this, verify both the patient's primary and secondary insurance and confirm the COB before submitting a claim. If there is any doubt, contact the patient and ask them to verify the COB with their insurers.
• Missing information: Secondary insurance claims may be denied if crucial information is missing. To avoid this, submit the original claim amount, details of how much the primary insurance paid, and any reasons why the primary insurance didn't pay the full claim. Include remittance information and the Explanation of Benefits (EOB) to help support the claim.
• Inaccurate or insufficient documentation: Incomplete patient information, missing signatures, and illegible paperwork can lead to claim rejection. Implement thorough documentation processes and use electronic systems to enhance accuracy and ensure all necessary information is included.
• Prior authorization: Prior authorization denials are a key driver of denied claims. To prevent this, obtain approval from the secondary insurance company before submitting the claim. Leverage technology, collaborate with payers, and educate patients about the process to streamline prior authorization management.
• Coding errors: Coding errors, such as mismatched diagnosis and procedure codes or incorrect modifiers, can lead to claim denials. Invest in robust coding education and training programs for staff and conduct regular audits and compliance checks to identify and rectify coding errors promptly.
• Timely filing: Insurance companies have specific time limits for submitting claims. Utilise electronic billing systems and set up reminder systems to ensure claims are submitted within the specified timeframe.
• Insurance coverage issues: Verify insurance coverage and eligibility prior to an appointment to avoid claim denials due to expired policies or services not covered under a patient's plan. Use back-end insurance discovery solutions to uncover hidden revenue where coverage may have been overlooked.

The patient's financial responsibility

Patients with multiple insurance plans often have a primary and a secondary insurance plan. While the primary insurance pays the claim first, the secondary insurance pays a portion of the remaining balance. However, having two insurance plans does not absolve the patient of their financial responsibility.

Patients are responsible for managing their insurance plans and informing each plan about their primary or secondary status. They are also responsible for paying copays, coinsurance, deductibles, or any other incurred costs. It is essential for patients to read the Explanation of Benefits (EOB) as their claims are processed. This document communicates the insurance company's breakdown of the claim, including the amount billed, the allowed amount, the amount paid to the provider, and any copayment, deductibles, or coinsurance due from the patient.

To improve the collection of patient financial responsibility, it is crucial to verify a patient's insurance coverage and eligibility for services. Providing out-of-pocket cost estimates and offering digital payment options can also enhance the patient experience and streamline the billing process.

Ultimately, the patient's financial responsibility involves understanding and fulfilling their financial obligations as outlined in the patient financial responsibility agreement and staying informed about their insurance coverage and associated costs.

Frequently asked questions